Closing a Business in Chicago

Closing a Business in Chicago

Posted By Rifkind Patrick LLC || 7-Jun-2017

Have you decided to close one of your businesses? If so, perhaps the business
has not been profitable. Perhaps you want to move on to something else,
or perhaps you want to move to another state.

Whatever your reason for shutting down operations, there are legal steps
that you will need to take before your business can be fully dissolved.

When you take the proper steps, you can shield yourself from future legal
issues. Winding down a business properly can protect your credit, reputation,
and help reduce or prevent litigation regarding the dissolution of a company.
This is very important if you plan on starting or running other businesses
down the road.

The following are just some of the steps you will need to take to close
down your business:

If you are in a partnership,
LLC, or have a corporation, you must have your business associates’
agreement to dissolve the company (or the majority of the owners must
agree to close the business).

Pay your business’s debts and taxes

Notify your employees, vendors, creditors, and customers

Cancel any licenses or permits

Cancel any applicable fictitious business names

Ensure the business is dissolved with the local and state government agencies

File final employment tax returns (if you have employees)

Report sales of business assets to the IRS

Report any exchange or sale of property used in your business to the IRS

Report your company’s capital gains or losses

File IRS Form 966,
Corporate Dissolution or Liquidation

File IRS Form 8594,
Asset Acquisition Statement

Paying Business Debts

More than likely, you are going to have numerous business debts, such as
money owed to suppliers, the landlord, vendors, utilities, credit card
companies, marketing companies, banks, etc.

When you notify your creditors that the business is closing, arrange to
pay off or settle all of the business debts actually owed. If a creditor
agrees to accept less than you owe, be sure to obtain a letter from the
creditor stating that the debt is paid in full.

If you are dissolving your business in Illinois or Wisconsin, you should
speak directly with a
business law attorney from
Rifkind Patrick LLC, especially if you don’t have the capital to pay all of your bills.
It is important that you know your options so you can minimize any risk
to your personal assets.